mine ground support utility vehicles contract … focus - bokan.pdf · adit access and blasthole...
TRANSCRIPT
MARCH 2013
Informed and in-depth editorial on the world mining industry
www.im-mining.com
MINE GROUND SUPPORT
UTILITY VEHICLES
CONTRACT MINING
COPPER EXTRACTION
PROJECT FOCUS: Bokan Mountain
Last November, Ucore Rare Metals reported
very strong results of the PEA completed
by Tetra Tech of the Dotson Ridge Zone of
its Bokan Mountain heavy rare earth property in
southeast Alaska. The Bokan property is
particularly enriched with heavy rare earth
elements, including the critical elements
dysprosium, terbium and yttrium. Approximately
40% (by weight) of the rare earth elements
contained on the Dotson Ridge property are
heavy rare earth elements.
In January when Ucore announced the filing of
the NI 43-101 Technical Report Preliminary
Economic Assessment on the Bokan Mountain
Rare Earth Element Project, near Ketchikan,
Alaska” on SEDAR, Jim McKenzie, President &
CEO of Ucore commented: “The report includes
an analysis of proposed mining methodologies,
mineral processing from mine mouth to market,
prospective planning and production timelines,
as well as anticipated capital and operating
costs, and expected IRR for the project.
Remarkably, the PEA supports a very straight-
forward mine development plan in combination
with a near term production horizon at Bokan.
What’s more, this affordable, high-return facility
will generate product that the US critically
requires. Every so often, a low cost, right-size
facility with a resilient high demand product
presents itself in the mining sector. Bokan is
such a facility.”
“Beyond representing an important milestone
in the development of the Bokan property, this
PEA opens the possibility of a complete
downstream rare earth industry in Alaska,” said
Ken Collison, Chief Operating Officer.
Ucore has multiple projects across North
America, but the primary focus is the 100%
owned Bokan – Dotson Ridge REE property,
which is located on Prince of Wales Island, some
60 km southwest of Ketchikan, Alaska and 140
km northwest of Prince Rupert, British
Columbia. It has direct ocean access to the
western seaboard and the Pacific Rim, a
significant advantage in developing near term
production facilities and limiting the capital
costs associated with mine construction. The
project is situated in the Tongass National
Forest, within an area set aside for natural
resource development.
Highlights of the PEA Include:
■ NPV: $577 million at a 10% discount rate, pre-
tax
■ IRR: 43%
■ Payback period: 2.3 years
■ Capital cost: $221 million, including a
complete on-site rare earth oxide (REO)
separation plant, and a contingency provision
in the amount of $25 million. Among the
lowest capital outlays in the rare earth mining
sector
■ Total revenue: estimated at $2,546 million
■ Mining rate: 1,500 t/d, 75% of mill feed is
eliminated via the use of Dual Energy X-Ray
Transmission (DEXRT) sorting and magnetic
separation, netting approximately 375 t/d to
feed the leach circuit
■ Average total rare earth recoveries: 81.6%
■ Production of REOs at site: deployment of
Solid Phase Extraction (SPE) technology to
generate high purity individual rare earth
oxides at the site
■ REO production: averaging 2,250 t/y during
the first five years at full production,
including 95 t of dysprosium oxide, 14 t of
terbium oxide, and 515 t of yttrium oxide
■ Mine Life: 11 years, based on existing Inferred
Mineral Resource estimate (April 21, 2011),
excluding highly prospective expansion at
depth, along strike, and other exploration
targets at the I&L Zone and beyond
■ Ease of shipping access: Only rare earth
project with immediate deep water shipping
facilities, “resulting in prospective mine-
mouth shipping rates among the lowest in
the industry,” Ucore says
■ Elimination of tailings on surface at closure:
“Only known mine to eliminate tailings on
surface at closure,” Ucore claims. All tailings
will be placed underground via cemented
paste backfill. The processing plant will
generate approximately 735 t/d of tailings,
significantly less than the mine requirement
of approximately 1,030 t/d backfill
■ Recycling of nitric acid: nitric acid that is not
12 International Mining | MARCH 2013
PROJECT FOCUS
Bokan rare earths
This Alaska project plans to usesome unique technologies, is
among the lowest capitalexpenditure (capex) of the world’s
current rare earth projects andhas US DOD backing
Float plane with BokanMountain in thebackground
DEXRT ore sorting
consumed in the leach circuit
will be recycled through the
use of diffusion dialysis,
greatly reducing acid
consumption by more than
75%, resulting in significant
financial and environmental
benefits
■ Near term, high value
production: relative high
percentage of rare earth
metals strategically critical to
the defence, clean energy,
aerospace, supercomputing
and transportation sectors:
including Tb, Dy and Y
■ Excellent geopolitical
support: offset of completion
risk through strong legislative
and financial support at state
and federal levels.
McKenzie explained: “Bokan’s unique
features have generated a capex that is among
the absolute lowest in the industry, remarkably
including full downstream separation facilities
that promise to render high purity oxides both
economically and on-site. In turn, the Bokan PEA
has delivered highly robust IRR and NPV
calculations. Beyond all of this, the Bokan
facility will have little in the way of direct
domestic competition. The facility will generate
critical technology metals that are indispensable
and increasingly difficult to obtain.
The PEA has been completed based on the
Aurora Geosciences’ Inferred Resource Estimate
Technical Report filed on April 21, 2011 by Ucore,
with the exclusion of the I&L Zone. The resource
incorporated into the current mine plan totals
5.3 Mt, with an average grade of 0.65% total
rare earth oxides (TREO), at a cutoff grade of
0.4% TREO. Of the TREO, approximately 40%
are comprised of heavy rare earth oxides.
The Dotson Ridge deposit is a well delineated
REE mineralised vein-dike system related to the
Mesozoic Bokan peralkaline granitic complex.
The mineralised system is a tabular body
exposed at the surface for a strike length of 3.5
km. The deposit was drilled to a depth of 450 m,
and remains open both along strike and at
depth. The system crops out along the ridge so
that it is readily accessible for drilling and bulk
sampling. The REE-bearing veins can be visually
identified from the surrounding host rock and
the material is amenable to Dual Energy X-Ray
Transmission (DEXRT) sorting. An existing road
network provides access to all main target
areas. There are a number of other occurrences
of REE mineralisation located within, or at the
margins of the Bokan complex which remain
highly prospective exploration targets.
Mining and beneficiationThe underground mine design was completed by
Stantec and contemplates trackless mining with
adit access and blasthole stoping with paste
backfill as the preferred mining method for the
project. This mining approach will result in a
production rate of 1,500 t/d, at a 0.4% TREO
cutoff grade.
The mine plan proposes the use of mill
tailings as cemented paste backfill to fill the
mined out areas of the underground workings.
At full production, the mill will produce some
735 t/d of tailings and the mine will require
1,030 t/d of backfill. This will result in all tailings
being placed underground as backfill, thereby
eliminating the need for a tailings facility at
surface upon mine closure. Waste rock will be
used for the remainder of the backfill.
The proposed processing flowsheet consists
of three areas: physical beneficiation, leaching
and downstream REO separation.
The mine’s 1,500 t/d of mineralised material
will be crushed and split into four size ranges.
The fines will by-pass the sorters and each of
the other size ranges will feed one of three
sorters using DEXRT. This circuit will reject
approximately 50% of the feed as waste. The
concentrate produced will then be further
crushed and ground in a rod mill. The resultant
material will be processed by magnetic
separators, which will reject a further 50% of
their feed as waste.
In total, approximately 75% of non-REE
bearing material will be discarded through the
physical beneficiation process. The remaining
375 t/d of concentrated mineralised material is
further ground to -40 μm and then fed to the
leaching circuit.
The physical beneficiation
circuit results in significant
savings initial capital
expenditure and ongoing
operating costs, due to reduced
power and acid consumption
during the leaching and
separation process.
The leaching circuit consists
of a nitric acid leach process.
The concentrated material is
leached using nitric acid heated
to 90°C. The resultant slurry is
filtered, with solids then
submitted to the backfill plant
to be placed underground as
cemented paste backfill. Prior
to the pregnant solution
continuing on to the separation
circuit it is treated by diffusion
dialysis in order to recover the
unconsumed nitric acid. The recovered acid is
then recycled into the leach circuit, resulting in
significant operating cost savings.
REO separation circuitThe separation of individual REOs is achieved
through the use of Solid Phase Extraction (SPE),
a technology developed by IntelliMet of
Montana, in conjunction with Ucore. The
pregnant leach solution generated by the nitric
acid leach is introduced into a series of purpose-
built SPE columns. The first stage of this process
removes nuisance materials such as thorium,
uranium, and iron from the solution. A
subsequent series of columns then separates
the rare earths into the following lanthanide
sub-classes, Ce-La; Pr-Nd; Y; Sm-Eu-Gd; Tb-Dy;
and Ho-Er-Tm-Yb-Lu. The final circuit of columns
then separates the subclasses into individual
rare earth chlorides, which can then be
precipitated to generate individual purified rare
earth oxides.
The SPE process produces chemical transfers
of selective elements from the pregnant solution
to a solid phase within a matter of seconds,
giving the columns the capacity to process a
large volume of solution in relatively small flow-
through extraction units. The result is a
relatively low initial capital cost for the SPE
circuits. Waste products from the separation
process will be returned underground as part of
the cemented backfill.
IntelliMet’s core technology is a resin material
that has greatly enhanced properties for metal
recovery compared with conventional resin or
carbon columns. The company says it believes
“the technology revolution enabled by the
‘Spiderweb’ media will create a paradigm shift in
metal recovery and hydrometallurgy technology.”
The Spiderweb media contains a tight packed
14 International Mining | MARCH 2013
PROJECT FOCUS
Drill platform at Dotson Shear
bed of beads, like a resin column, but instead of
putting the binding groups inside the beads,
IntelliMet places the binding groups on polymer
strung between the beads, that catches metals
passing through the bed like flies passing
through a spider web. Because the Spiderweb
has immediate contact with the metal solution,
time is not required for the metals to diffuse into
the bead, so binding and recovery are nearly
instantaneous.
Because of the rapid exchange properties of
the Spiderweb, metal recoveries are near
quantitative, metal separation/purity is high,
and contaminants can be removed to non-detect
with one pass through the column. The
expertise of the IntelliMet team in
inorganic/metal binding chemistry enables the
development of specialty binding groups to
solve the particular separation challenges of a
given metal stream.
It was October last year that Ucore reported
the results of laboratory experiments which
successfully separated the critical metals:
dysprosium (Dy), neodymium (Nd) and erbium
(Er) from the other REEs in a mixed concentrate.
The work was performed by IntelliMet on
composite solutions designed specifically to
replicate the contents of the ore from Bokan
Mountain. These metallurgy findings were
significant, since Dy and Nd are now listed as
among the most critically important strategic
metals to the US, as determined by the US
Department of Energy and US Department of
Defense.
McKenzie explained then that “the isolation
of a chemical form of dysprosium from a US-
based deposit has been a ‘holy grail’ of sorts in
the domestic rare earth industry. Now that
dysprosium has been liberated at laboratory
scale, our intent is to pursue this breakthrough
at a pilot plant level in conjunction with the
company’s arrangement with the US Department
of Defense (Defense Logistics Agency (DLA)).
“Ucore has taken a significant leap toward
not just producing a mixed REE concentrate, but
also towards separating and refining high purity
individual CREOs, or Critical Rare Earth Oxides,
on US soil utilising innovative US technology.
We’d like to express our thanks to Ucore
Advisory Board member, Dr Richard Hammen,
for his exceptional work in Solid Phase
Extraction (SPE) technology. SPE is a uniquely
American technology which combines rare earth
extraction from process leach solutions with a
separation regime that utilises innovative
polymer nanotechnology.”
At that time, Hammen made a presentation to
the 51st Annual Conference of Metallurgists
(ACOM) of the Canadian Institute of Mining in
Niagara Falls, Ontario, entitled: The state of the
art in separating and purifying the heavy rare
earths: solvent exchange, ion exchange, and
solid phase extraction, which is the optimal process?
It can be accessed through the following link:
http://ucore.com/DrHammen2012.pdf
Hammen, the inventor of the successful SPE
process to separate and purifying REEs,
presented the application of the technology to
the separation and purification of REE in liquid
solutions. He discussed the results using SPE
columns specifically developed to improve the
speed and expected economy, compared to
existing SX technology, of REE separation and
purification.
Hammen discusses six chemical separation
tools for REE purification. The first is to displace
light by heavies (e.g. La displaced by Nd and
heavier), then displace heavy elements by light
elements. In the third stage, load, then rinse out
heavy>light (e.g. Nd>Pr), followed by the fourth
stage of load, then elute light>heavy with well
know pH gradients. Then increase separation
with a second “amplifier” column in series and
finally use the ionic charge of REE to get large
separation factors (Ce+4, Eu+2).
Initial capital costs include all costs required
to bring the facility to production. The ongoing
sustaining capital costs are estimated to be
$145 million over the 11 year mine life.
16 International Mining | MARCH 2013
PROJECT FOCUS
Performing tests on samples
The IntelliMet Spiderweb
Mixed REE
Solution
Column Set 1
Rough Subclass
Separation
Oxidize And Recover CeO2 ppt
Column Set 2 Lanthanum/
Cerium Separation
Ce2O3 Product
La2O3
Product
La/Ce
Steam
Column Set 3
Didymium
Purification
Crude
Pr/Nd
Stream
Crude
SEG+Heavy
Stream
Column Set 5
SEG +
Heavy Purification
Pure
Pr/Nd
Column Set 4
Pr/Nd
Separation
Pr2O3 Product
Nd2O3 Product
Pure
SEG+
Heavy
Stream Column Set 6
SEG/Heavy
Split
Sm+
Eu+Gd Column Set 7
Sm/Eu/Gd Separation
Sm2O3 Product
Eu2O3 Product
Gd2O3 Product Column Set 8
Heavy/Ultraheavy Separation
Ultraheavy Mix
Column Set 9
Dy/Tb Separation
Tb2O3
Dy2O3
IntelliMet overall REE separation scheme
Ucore is currently conducting environmental
baseline studies to prepare for the forthcoming
permitting process at the Dotson Ridge project.
The project plan is being developed in
consultation with local stakeholders as well as
state and federal regulators. A Plan of
Operations, which will be based upon
engineered facility designs advanced from the
concepts presented in the PEA, will be
submitted to the US Forest Service (USFS) to
initiate a National Environmental Policy Act
(NEPA) review. Permitting advantages for the
project include the elimination of a permanent
surface tailings storage facility, due to the use of
x-ray sorting technology, which will allow for
100% of the mill tailings to be placed in mined
out areas underground as cemented paste
backfill. The study includes cost estimates for
site water management and treatment.
Defence contractThe US Department of Defense (DOD) has
contracted with Ucore via its US operating
subsidiary Landmark Alaska to conduct a
mineralogical and metallurgical study on Bokan.
The program, to be managed by DOD under the
Defense Logistics Agency (DLA) will focus on
possible development of Bokan Mountain to
meet the requirements of the DOD for an
ongoing supply of critical heavy REEs. Ucore is
providing DOD with the most up-to-date data on
the Bokan project’s mineralogy and proprietary
bench and pilot scale SPE nanotechnology
research.
DOD considers yttrium, terbium, and
dysprosium to be “critical to the production,
sustainment, or operation of significant US
military equipment,” as well as “subject to
interruption of supply, based on actions or
events outside the control of the government of
the US.” Yttrium, in particular, was shown to be
in deficit when considering projected future
domestic supply.
Bokan Mountain is the richest known
domestic source of dysprosium, terbium, and
yttrium. They are critical to several advanced
weapon systems, such as stealth helicopters
and precision-guided weapons.
McKenzie said at the time that “the
Department of Defense’s investment in the
Bokan deposit and Ucore’s proprietary SPE
technology represents a significant step toward
recapturing the rare earths technological lead
surrendered to China decades ago. What’s more,
the DOD relationship adds a great deal of
credibility to Ucore’s domestic supply chain
development, representing one of the largest
purchasing capabilities amongst prospective
customers worldwide.” IM
MARCH 2013 | International Mining 19
PROJECT FOCUS
Item Total cost (million $US)
Direct capital cost
Site development 6.1
Mine underground 18.9
Mine surface facilities 23.8
Process 62.9
Tailings and waste rock management 10.1
Utilities 3.4
Buildings 3.0
Temporary facilities 5.2
Plant mobile equipment & misc. 1.4
Subtotal 134.7
Indirect capital cost
Indirect construction costs 51.1
Owner’s costs 10.9
Contingency 24.5
Subtotal 86.5
Total capital cost 221.3
Capital cost estimate
Operating cost estimate
Item Average unit cost
Mining 41.69 $/t mined
Processing 54.83 $/t mined
G&A 13.56 $/t mined
Power 11.78 $/t mined
Miscellaneous 0.93 $/t mined
Total operating cost 122.78 $/t mined
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